Commercial mortgage debt hits $3.21 trillion in Q1

Commercial and multifamily mortgage debt held by major investors rose by $44.3 billion
this past first quarter, the fastest growth for that quarter since the Great Recession,
the Mortgage Bankers Association (MBA) reported. Total commercial and multifamily
mortgage debt increased to $3.21 trillion, with multifamily mortgage debt comprising

$1.3 trillion of the total. The first-quarter 2018 increase was driven, in part, by the commercial mortgage-backed securities market, which added $6 billion in mortgage debt to the
balance, MBA reported.

Zillow: Rent growth remains stable

U.S. residential rental rates were rising at a faster pace than last year, but the trends in
the rental market suggest stability, Zillow reports. Zillow’s rent index rose 2.1 percent
year over year this past May, to a median rental rate of $1,440 per month, a level
considered sustainable, according to Zillow analysts. In May 2017, the U.S. median rent
rose at an annual pace of just 70 basis points. Pittsburgh, Detroit and Houston were
seeing the greatest acceleration in rental growth earlier in 2018.

Commercial asset prices hit new record

The Real Capital Analytics (RCA) all-property index increased by 60 basis points over the
prior month and 7. 9 percent year over year, pushing it 23 percent higher than the prior
index peak reached in August 2007. Notably, however, office-property prices in central
business districts fell 30 basis points over the prior month and were down 1.1 percent
year over year.

Fitch: Commercial real estate cycle has plenty of life yet

The U.S. commercial real estate market is near the end of the traditional 10-year cycle,
but the market is behaving more like it would at the midway point of a recovery as
opposed to one that is doomed to turn down imminently, according to Fitch Ratings.

Construction activity remains “muted,” however, and prices for new assets are only
rising in areas that appear to have demand for them. The underwriting standards
on conduit loans have improved since 2015, which is also unusual late in the cycle,
Fitch said.

Hotels can handle the next downturn, CBRE says

Even if the economy were to experience a normal downturn over the next two years,
hotel owners would still do quite well, according to CBRE Hotels. The hotel-services
company says hotel-occupancy levels have stabilized near a record level, and new
rooms are coming online at a slightly slower pace than the growth in the demand for
hotel rooms. CBRE expects the economy to soften in late 2019, slowing the growth of
hotel revenues and slightly reducing occupancy levels from the current record levels. n

Continued >>

In BriefNews Roundup

By Victor Whitman

The projected hotel-occupancy rate for 2018,a record high

Source: CBRE Hotels

The national average monthly apartmentrent as of this past June, up 2.9 percentyear over year — and an all-time high

Source: Yardi Matrix

3%The year-over-year increase as of the pastfirst quarter in the total sales volume ofmajor commercial property assets